Top stories in Huntsville real estate included effects of tornadoes, a quick recovery and 'a surge' heading into 2012

Huntsville Times staffValerie Miles, president of the Huntsville Area Association of Realtors, believes consumer confidence has risen in 2011.

HUNTSVILLE, Alabama - Among the big stories in local real estate this year were the effects of the tornadoes of April 27 and the increased consumer confidence, in the view of Valerie Miles, the president of the Huntsville Area Association of Realtors.

When the final figures are totaled, home sales are expected to be down about 4 percent from 2010, Miles said.

She expects a decline of about 2 percent from 2010 in the median home price and a 3.5 percent decrease in housing inventory.

The latter decrease is welcomed news.

"In November, we (were) at a 8.35 months supply,'' she said. "We are encouraged because this is an indicator that it shows we are trending toward the ideal benchmark of six months inventory.

"This decrease is positive."

Among the factors for the decline in home sales, she said, are the April 27 tornadoes and the lingering effects from the federal tax credit for homebuyers, which ended last year.

The tornadoes caused a steep decline in home sales - a 20.24 percent drop from March and a 34.63 percent drop from last April.

But there was a sharp rise in home sales in May, triggering three straight months of increases.

"The tornado did stall sales, without a doubt," said Oscar Gonzales, the CEO of the Huntsville Area Association of Realtors. "But we bounced back quick.''

In August, when S&P announced that it had lowered the United States' AAA credit rating for the first time, local sales began to settle from month to month.

"The uncertainty that seemed to go on about the U.S. credit rating, that affected us nationally and locally," Miles said.

Sales, though, were higher in August, September and October compared to sales from the same months in 2010.

"What we saw toward the end, without a doubt, was a surge," Gonzales said. "The uncertainty (had) become the norm. (Consumers) are getting past that.''

Miles believes overall lack of consumer confidence was a factor in the drop in home sales from 2010. But as the year closes, she believes there are also signs of renewed confidence in the local housing market.

With lower interest rates and home prices, she said, there are strong indications that activity is on the rise, giving her optimism for 2012.

Activity is particularly strong in the $150,000-$200,000 price range, she said.

"We feel the buyers are more comfortable with smaller mortgages and more affordable homes," she said. "That is a national trend, as well.''

In September, Dr. Lawrence Yun, chief economist and senior vice president for the National Association of Realtors, told a capacity crowd at the Von Braun Center's East Hall how Huntsville has overcome many trends in today's economy.

Yun said at the first North Alabama Real Estate Economic Summit that Huntsville "defies all odds of everything."

He called the town "an anomaly," and said the local real estate market is "much better than just about any part of the country."

At the end of the year, another indication of the health of the Huntsville real estate market is how sales of new homes comprises overall home sales - about 35 percent, by Gonzales' estimate.

"It's unheard of," Gonzales said. "We're one of the few markets, less than 10 around the country, that have that kind of profile in sales.